. A subsidy:
A. All of these statements are true.
B. is a requirement that the government pay an extra amount to producers or consumers of a good.
C. is used by governments to encourage the production and consumption of a particular good or service.
D. is used by governments as an alternative to price controls to benefit certain groups without generating a shortage or a surplus.
A. All of these statements are true.
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Because leisure is a normal good, an increase in the wage rate will result in
A) an increase in the quantity of labor supplied because of the substitution effect. At low wages the income effect causes an increase in the quantity of labor supplied, but at high wages the income effect causes a decrease in the quantity of labor supplied as the wage rises. B) an increase in the quantity of labor supplied because of both the substitution effect and the income effect. C) a decrease in the quantity of labor supplied because of the substitution effect and an increase in the quantity of labor supplied because of the income effect. D) an increase in the quantity of labor supplied because of the substitution effect and a decrease in the quantity of labor supplied because of the income effect.
Projection bias:
A. is the tendency to evaluate present consequences based upon tastes and needs of the future. B. is the tendency to evaluate future consequences based on tastes and needs at the moment of the decision making. C. is the tendency to project future states of mind to the present. D. can lead people to overestimate their adaptability.
Since 1970, has the distribution of income in the US become more equal, less equal, or remained unchanged?
How does Professor Tabarrok describe a situation in which someone receives a gift that they don't value?
A. The incentive problem B. Negative trade C. The knowledge problem D. Negative charity